Bid talk lifts Lloyds

Click to follow
The Independent Online
Lloyds Chemists, the drug store group whose interests include the Holland & Barrett health food stores, remained the subject of takeover speculation yesterday as shares rose another 3p to 215p, writes Nigel Cope.

Stock market rumours suggest the company has been the subject of bid approaches and that Lloyds' merchant bank, Samuel Montagu, has been contacting potentially interested parties. Kingfisher, the retail group which owns the Superdrug chain, is thought to have been approached but shied away from a deal. Kingfisher yesterday said it would not comment on market rumours. However, the company has enjoyed a successful trial of pharmacies in Superdrug branches and is extending the number from 12 to 40.

Lloyds Chemists founder, chairman and largest shareholder, Allen Lloyd, is believed to feel that the City has always undervalued the company he begain in 1973 with a single pharmacy. Some in the Square Mile feel Mr Allen may have had enough. Yesterday, he dismissed such suggestions. "I have no comment on rumour," he said. "I have never made derogatory remarks about the City."

Though Mr Lloyd may wantto sell, some City analysts struggle to see who would be interested in buying the company, which has seen its share price slump from 325p last August.

Lloyds Chemists' shares fell by 16 per cent in March when it announced a surprise re-organisation of its drugstore division, including 1,000 job losses and closure of 100 shops.

Two weeks ago, the chairman's brother, Peter, announced his resignation from the chief executive position due to ill health.

Recent expansion into health and beauty areas takes it into closer competition with groups such as Boots and Marks & Spencer. Profits for the six months to the end of December edged ahead to pounds 26.6m, though the 380-strong drugstore division made its first ever loss.

A feature which could make Lloyds attractive is its pharmacy licences, which can cost around pounds 350,000. These would be valuable to any company wishing to expand in this area.

Comments